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Panel to meet on airports' revamp

Four bidders and Reliance will be closely watching the panel's decision on Tuesday. Can our airports be like this?

india Updated: Jan 23, 2006 21:35 IST

A group of ministers led by Defence Minister Pranab Mukherjee will meet in New Delhi on Tuesday for a final evaluation of technical bids for modernising the Mumbai and Delhi airports.

Four bidders, who were earlier excluded from the airport revamp, and business major Reliance will be closely watching the panel's decision on the issue.

The group of ministers had met on January 12 and asked the Delhi Metro Rail Corporation managing director E Sreedharan to re-evaluate all six bidders, including four who had initially filed tenders to bag the Delhi and Mumbai airport contracts.

What remains to be seen is whether the panel relaxes the minimum qualifying marks for bids, which five of the groups have so far failed to score.

Sreedharan had earlier evaluated only two bidders, GMR and the Reliance groups, which had qualified for the final round after an initial evaluation process by the government.

His rating, however, downgraded Reliance and eliminated it from the process. Sreedharan said the group failed to score the minimum 80 points needed to qualify for the tender process.

The fresh rating meant only the GMR group had qualified and that only one airport would have a bid for its revamp.

Sreedharan then recommended that a Special Purpose Vehicle (SPV) be floated for the other airport that did not have a consortium bidding for it.

The SPV would have the Airports Authority of India (AAI) with private partners to upgrade the airport, he said.

This report was not acceptable to many in the government and even the civil aviation ministry made it clear that there was no scope for an SPV with the AAI.

However, Sreedharan's report could not be ignored completely and he was asked to re-evaluate Reliance along with four bidders left out earlier.

Declaring that a lot of time had been lost, Civil Aviation Secretary Ajay Prasad said: "Once the technical bids are evaluated and considered, we will examine them on financial grounds and the one that offers us the highest revenue would bag the contract."

The government first sought bids from local and overseas companies for a 74 per cent share each in the two airport projects in June 2004.

The plan was delayed for over a year because of opposition from lawmakers, after which the government cut the amount of stake overseas investors can pick up to 49 per cent by amending the Airports Authority of India Act.

Six consortia were in the race for the airport revamp after the withdrawal of Hochtief AG and Singapore Airport Changi Enterprises. While all the six bid for the Mumbai airport revamp, five of them were in the fray for the Delhi project.

The five bidders for Delhi airport included GMR in a tie-up with the operators of the Frankfurt airport, Fraport, and Reliance, which had submitted a bid with ASA Mexico.

The others in the fray were DS Construction that had a tie-up with Munich airport, Macquaire that tied up with Airport de Paris, and the Essel Group in association with the Turkish airport operator TAV.

Apart from these five, the GVK group -- that has a tie-up with the South African Airport -- also contested for Mumbai.

Civil Aviation Minister Praful Patel has said bids for the airport modernisation would be selected by January 31 as the process had been delayed for too long.

First Published: Jan 23, 2006 21:23 IST